Why Airline Credit Cards Hurt More Than They Help

by Roman on January 16, 2010

There are dozens of different airlines and it seems that each of them has their own credit card. Although they all claim to be an excellent way to earn frequent flyer miles they rarely live up to that promise.

Truth About The Reward Miles

Virtually every airline card out there gives you the same reward – for every dollar you get one mile. When you calculate it out, you start to realize just how unrewarding this really is. Usually to get a domestic round-trip ticket in the continental United States, you need 25,000 to 37,500 or more miles. That means you will need to spend at least $25,000 to $37,500 to get one round-trip (and that’s only for “off-peak” itineraries).

Meanwhile, a simple 1% cash back credit card would give you $250 to $375 for that same amount of spending… money you could use to simply buy a plane ticket yourself and you’d even have a hundred or more dollars left.

Why Annual Fees Don’t Make Sense

According to an American Airlines credit card review, the annual fee is $85.00. So right off the bat you are $85 in the hole after you apply for the card. Then on top of that, they have additional fees. For example, if you redeem your miles for an American Airlines flight that departs in six days or less, they charge a hundred dollar fee.

Unfortunately, pretty much every airline card carries an annual fee of some sort. It just doesn’t make sense to pay for these cards that have such inferior rewards.

What’s Your Best Bet?

Most cash back credit cards give at least 1% to 1.5% and have no annual fee. You’re probably better off using that rebate to buy plane tickets yourself.

Yeah, I’m not really a fan of airline credit cards. After weighing out the pros and cons, there seems to be way more cons…Like what you said, I would much rather prefer a cash back rewards card from AmEx or something…I see many more benefits with that.